YEREVAN (CoinChapter.com) — While the calendar year may be new, not everything in the cryptocurrency industry is as fresh. Some anti-crypto laws have come to haunt investors. In particular, the Infrastructure Investment and Jobs Act, which passed the US Congress in 2021, came into force on Jan. 1. Thanks to new amendments to the Tax Code, anyone receiving $10,000 or more in business transactions must report it to the Internal Revenue Service (IRS) within 15 days.
Report Crypto Tax Obligations in Two Weeks Or?
In what comes as a further outrageous demand, the filed report (via Form 8300) must include the name, address, and Social Security number of the person sending the funds to you. Additionally, the date and nature of the transaction, along with the amount, must also be included.
According to the cryptocurrency advocacy group Coin Center, complying with the new anti-crypto dictates will be difficult. Despite the lack of clarity, the regulators now have the arbitrary power to issue crackdowns.
“If you don’t file a report within 15 days of receiving the transaction, you could be found guilty of a felony offense,”
Coin Center warned in an official post.
The new guidelines now also appear on the IRS’s official website. According to the US taxing authority, those receiving over $10,000 must also send a written notification to each individual listed on the form. This comes in addition to submitting Form 8300.
Those failing to provide this notification by Jan. 31 of the year following the transaction will be subject to penalties.
Anti-Crypto Law Challenged in Court
The bizarre nature of the new law stands challenged in the court. Coin Centre, which has since termed the law “unconstitutional,” has filed suit in federal district court against the US Treasury Department.
Filed in June 2022, the suit is still pending in the courts. The organization has pointed out that the rule is impossible to comply with and trumps basic liberties.
For example, getting $10,000 in cryptocurrencies from decentralized exchanges makes filing the sender’s name difficult. Moreover, anonymous donations to organizations will no longer be so. The Government will have the list of donors who would rather be kept unknown.
“If a miner or validator receives block rewards in excess of $10,000, whose name, address, and Social Security number do they report? If you engage in an on-chain decentralized exchange of crypto for crypto and you therefore receive $10,000 in cryptocurrency, who do you report?,”
the organization asked.
Coin Center has also objected to the lack of clarity around determining the value of any particular cryptocurrency. Who decides the fiat worth of the cryptos received, and what method will be used?
It has been just two days since the anti-crypto law came into effect. As people attempt to comply, the drawbacks will become clear in time. Meanwhile, one can only hope Coin Center’s suit reaps positive results.
